Findings Of Fact By Stipulation filed September 11, 1986, the parties agreed to findings of fact 1-11. Donna Sawyer filed a preliminary application to participate in the state lottery for liquor license on January 20, 1984, on Department of Business Regulation form No. 747L. On September 18, 1984, Donna Sawyer was notified by Respondent that she had been selected in the lottery held on September 12, 1984, to be eligible to apply for a state quota liquor license. That on or about November 2, 1984, Donna Sawyer, acting through her wholly owned corporation, Sarasota County Liquors, Inc., filed a sworn "application for Alcoholic Beverage License" (Department of Business Regulation Form No. 700L), with the Division of Alcoholic Beverages and Tobacco. That application included a description of a location which was to be the licensed premises. A Personal Questionaire, Department of Business Regulation Form 710L, was also included by Petitioner with said application. The license application was denied by Respondent on March 8, 1985. The grounds for the denial as stated in the denial letter were Petitioner's failure to provide: (1) proof of right of occupancy to the premises Petitioner was seeking to license; (2) verification of financial investment; (3) business name, and (4) sketch of the premises affixed to the application. On April 10, 1985, Sandra Allen, Esquire, acting on behalf of Petitioner, requested an administrative hearing in order to contest the March 8, 1985, denial of the subject license. Joseph Forbes, Esquire, of Gainesville, Florida, was then retained by Petitioner to resolve the denial of the requested license, which was then pending before the Director of the Division of Alcoholic Beverages and Tobacco, as an informal administrative proceeding, pursuant to Section 120.57(2), Florida Statutes. In this capacity, Forbes, among other things filed a Motion for Continuance and Stipulation in this case attached to a June 6, 1985 cover letter. Forbes thereafter reached an agreement in the informal proceeding with Thomas Klein, Esquire, then counsel of record for Respondent, evidenced by letter dated October 1, 1985, which in its relevant portions indicated: This is to continue our telephone conversation of October 1, 1985, in which the following was discussed and agreed upon: Sarasota Liquors - your client will have 45 days from the date of this letter to cure the defects set forth in the March 8, 1985 letter of denial. Please direct your client to respond to the Tallahassee office. In order to rectify the original deficiencies causing the license denial, Petitioner re-filed an Application for Alcoholic Beverage License, Department of Business Regulation Form 700L, including exhibits, with Respondent, on or about November 13, 1985. Petitioner's re-filed license application was denied by Respondent on February 19, 1986, for two reasons: (1) "Application incomplete as applicant does not have right of occupancy to the premises for which she is seeking to license," and (2) "Division is unable to fully investigate applicant's financial documentation." On or about November 4, 1985, while searching for a location to submit as the licensed premises, in the re-filed application of November 13, 1985, Donna Sawyer and Ocie Allen met with Alton Allen at 258 S. Tamiami Trail, Sarasota, Florida, who was an agent for Walter Spector, owner of several retail store spaces at that address. Ocie Allen, acting on behalf of his corporation, Ft. Myers A & T Corporation, entered into a lease for a store at 258 S. Tamiami Trail, Sarasota, Florida. On or about November 4, 1985, Ocie Allen, acting on behalf of his corporation Ft. Myers A & T Corporation, purportedly subleased the premises at 258 S. Tamiami Trail, Sarasota, Florida to Petitioner. That Petitioner had submitted a letter dated November 4, 1984, signed by Jim Irey, as President of Florida Home Equity of Lee County, Inc., which is attached to the November 13, 1985 application, which stated that certain financial support would be available to the subject alcoholic beverage sales contemplated by Petitioner. That as a result of the investigation following the November 13, 1985 application, Respondent was "unable to fully investigate applicant's financial documentation," since Respondent's agents were unable to locate Jim Irey or his company at the address indicated on the November 4, 1984 letter. Based upon the evidence presented, the following additional findings of fact are made: Donna Sawyer's preliminary application to participate in the state lottery for a quota liquor license included instructions to the applicant that it was the first part of a two part application and that the second part would require proof of occupancy for the premises to be licensed. The second part of the application was that license application filed with the Division of Alcoholic Beverages and Tobacco on November 2, 1984, and again on November 13, 1985. As part of the notification that she was eligible to apply for a state quota liquor license, Donna Sawyer was advised that she had 45 days to file a full and complete application and that if she failed to do so, this failure would be deemed as a waiver of her right to file for a new quota liquor license. The letter also advised her that the Division had 180 days from the date of the drawing to act upon her application. The Petitioner's first quota liquor license application was denied on March 8, 1985. March 8, 1985, was within 180 days of the applicable lottery drawing held on September 12, 1984. The agreement of the parties to resolve the March 8, 1985, denial of the subject license evidences an tacit agreement by the parties to waive any applicable time limits existing at that time in order to allow the Petitioner to resubmit a corrected application within 45 days as allowed by the Thomas Klein letter of October 1, 1985. The Division investigated the Petitioner's second application and determined that the applicant did not have a right of occupancy to the premises sought to be licensed, 258 Tamiami Trail, Sarasota, Florida, because Petitioner only had a purported sublease for the subject premises from Ft. Myers A & T Corporation. Ft. Myers A & T Corporation had obtained a lease for the property on November 4, 1985, from Walter Spector, deceased at the time of the administrative hearing. Said lease between Walter Spector, lessor, and Ft. Myers A & T Corporation, lessee, provided that subleases must be approved by the lessor and be in writing. The Petitioner did not produce evidence of written authorization by Walter Spector to allow Ocie Allen or Ft. Myers A & T Corporation, Inc., to sublease the subject premises to the Petitioner or to any other person. The only evidence of such authorization was the hearsay statement by Ocie Allen that Walter Spector had orally given such authorization. Furthermore, Mr. Alton Allen, then agent for Mr. Spector for leasing this property testified he had no knowledge that Mr. Spector was ever informed of a sublease. Therefore it is found that the sublease violated a material provision of the underlying lease from Walter Spector to Ft. Myers A & T Corporation. Mr. Ocie Allen, agent for the Petitioner and Donna Sawyer, testified and it is found that there was no intention for the Petitioner to operate an alcoholic beverage license at the 258 Tamiami Trail location. Petitioner's November 13, 1985, license application was also denied on February 19, 1986, for: Application incomplete as . . . the Division is unable to fully investigate applicant's financial documentation. This denial was due to the Division's agents being unable to verify the availability of financial funding from Florida Home Equity of Lee County, Inc. The Petitioner had submitted a November 9, 1984 letter from that corporation in its November 13, 1985 license application offering certain funding. Upon checking phone directories and making attempted telephone calls to the source named in that letter, the Division was not able to find the named business as source of funding. The Division further investigated Florida Home Equity of Lee County, Inc. as an alleged source of funding by sending an agent, Robert B. Baggett, to the address supplied by the applicant in a November 9, 1984 letter from Florida Home Equity of Lee County, Inc., only to find that no such business was located there and no neighbors knew of a new location. Sandra Allen, Esquire, testified that the source of the funding at the time of the second application was a new company run by the same person who was behind Florida Home Equity of Lee County, Inc., which was named as the source in the November 9, 1984 letter. However, this new company's name and address and verification of continued financial support to the Petitioner could not reasonably be determined by the Division and no evidence was presented that the Division had ever been provided with said new company's name or location prior to the denial of the second license application. Contradictory testimony was presented by Lt. Ewing and Sgt. Mills as to the existence of a policy requiring a "14 day" deficiency notice letter to applicants. It is clear that that policy was not recognized in the office supervised by Sgt. Mills. It was also not established that Lt. Ewing had the authority to set or enunciate policy for the Division.
Findings Of Fact Based on the evidence presented at hearing, the following facts are determined: At all times material to the charges, Ronald Wayne Diamond and Susan Joyce Saiia owned and operated a partnership trading as Susan's Las Olas Seafood Market at 1404 E. Las Olas Boulevard, Fort Lauderdale, Florida ("the licensed premises") On the licensed premises, they sold alcoholic beverages under the authority of alcoholic beverage license No. 16-3029, Series 2-APS. On January 17 or 18, 1982,and on January 19, 1982, Broward County Sheriff's Department Detective Fernandez entered the licensed premises in an undercover capacity and negotiated with Respondent Ronald Diamond for the sale and delivery of cocaine and cannabis. Respondent Susan Saiia was present and aware of these negotiations, although she did not actively participate in them. On one of these occasions, she warned Respondent Diamond to be careful, that she had seen someone in the back alley who looked like he was wearing a recording device. On January 20, 1982, Respondent Diamond was arrested on charges of unlawful trafficking in cocaine and possessing cannabis in violation of Sections 893.135(1)(b) and 893.13(1)(e), Florida Statutes. He was taken to the licensed premises where a search warrant was executed and two ounces of marijuana were found in an office file cabinet. (Petitioner's Exhibit No. 2) On May 6, 1982, the Circuit Court of the Seventeenth Judicial Circuit, adjudging Respondent Diamond guilty of these felonies, sentenced him to fifteen years in prison and fined him $250,000 for trafficking in cocaine. He was sentenced to an additional five years for the possession of cannabis. (Petitioner's Exhibit No. 3)
Recommendation Based on the foregoing, it is RECOMMENDED: That Respondents' alcoholic beverage license No. 16-3029, Series 2-APS, be revoked for multiple violations of the Beverage Law. DONE and ORDERED this 12th day of July, 1983, in Tallahassee, Florida. R. L. CALEEN, JR. Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 12th day of July, 1983. COPIES FURNISHED: John A. Hoggs, Esquire Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301 Maurice Graham, Esquire Suite 2 2161 E. Commercial Blvd. Ft. Lauderdale, Florida 33308 Howard M. Rasmussen Director Division of Alcoholic Beverages and Tobacco 725 South Bronough Street Tallahassee, Florida 32301 Gary R. Rutledge Secretary Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301
The Issue This case concerns the issue of whether the Respondent properly denied Petitioner's entitlement to a quota beverage license in Bradford County, Florida. At the formal hearing the Petitioner called as witnesses Allen F. Nash and, by deposition, L. B. Schoenfeld. Petitioner also testified on her own behalf. The Respondent called as its only witness Allen F. Nash. The Petitioner offered and had admitted into evidence four exhibits. The Respondent offered no exhibits into evidence. Counsel for the Petitioner and counsel for the Respondent submitted proposed findings of fact and conclusions of law for consideration by the Hearing Officer. To the extent that these proposed findings of fact and conclusions of law are inconsistent with the findings and conclusions in this order, they were considered by the Hearing Officer and rejected as being not supported by the evidence or unnecessary to the disposition of this cause.
Findings Of Fact The Petitioner in this case is an applicant for a quota beverage license and filed her initial application for that license on October 23, 1981. That application was titled "Preliminary Application for New Quota Alcoholic Beverage License." Paragraph five of the instructions contained in the preliminary application referred to above states: This is Part I of a two (2) part application. Part II will be fur- nished to you if selected in the drawing. Part II includes among other things, health approval (if required), zoning approval and proof of right of occupancy. On October 13, 1982, the Petitioner was notified by letter from the Director of the Division of Alcoholic Beverages and Tobacco that she had been selected in the random drawing on October 6, 1983, for a new quota beverage license for Starke, Bradford County, Florida. This letter informed Petitioner that her name had been drawn and that the agency must act on her application within 180 days of the drawing. Paragraph three of that letter states: We suggest that you contact our Jackson- ville field office located at the Richard P. Daniel Building, 111 East Coastline Drive, Suite 514, Jacksonville, as soon as pos- sible. You must file your complete appli- cation which will include, among other items, a location, zoning approval, and fingerprints, if you are not already a current licensee, for yourself and those to be interested with you in your business. Please bear in mind that our agency has only 180 days from the date of the drawing to act upon your application. We urge you to move forward in order to save time necessary to process the appli- cation and complete the investigative process. On October 22, 1982, the Division of Alcoholic Beverages and Tobacco forwarded to Petitioner the forms necessary to complete Part II of the application process. Those forms and the accompanying letter were received by the Petitioner. Petitioner failed to file Part II of the application and on April 7, 1983, the Division of Alcoholic Beverages and Tobacco by letter notified the Petitioner that her entitlement to a quota beverage license had been disapproved. The authority for such disapproval was given as Florida Statute 561.17 and Florida Statute 561.19. The information which was to be provided subsequent to the drawing, which was not included in the preliminary application, included: Information relating to the right of the applicant to occupy the premises to be licensed. The health approval of the premises to be licensed. This approval must be signed by a proper representative of the state/county health authorities. Information relating to the zoning of the premises to be licensed. A portion of the second application form in section 7 must be completed by the local zoning authorities and must reflect that the premises to be licensed complies with the local zoning ordinance for the sale of alcoholic beverages.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the Division of Alcoholic Beverages and Tobacco issue a final order denying Petitioner's application for a quota beverage license. DONE AND ENTERED this 16th day of November, 1983, at Tallahassee, Florida. MARVIN E. CHAVIS, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 16th day of November, 1983. COPIES FURNISHED: Dennis E. LaRosa, Esquire 516 North Duval Street Tallahassee, Florida 32301 James N. Watson, Jr., Esquire Staff Attorney Department of Business Regulation 725 South Bronough Street Tallahassee, Florida u2301 Howard M. Rasmussen, Director Division of Alcoholic Beverages and Tobacco Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301 Gary R. Rutledge, Secretary Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301
The Issue The issue is whether Respondent's Policy Statement, that the inclusion of revoked quota licenses in Section 561.19, Florida Statutes, double-random selection by public drawing, constitutes an unpromulgated rule contrary to Sections 120.54 and 120.56(4), Florida Statutes.
Findings Of Fact Based upon observation of the witness and his demeanor while testifying, the documentary materials received in evidence, stipulations by the parties, and the entire record complied herein, the following relevant and material facts are found. The Department of Business and Professional Regulation, Division of Alcoholic Beverages and Tobacco, is the state Agency responsible for implementation of Chapter 561, Florida Statutes, Beverage Law Administration. In July 2001, Petitioner (BHI) made applications to the Agency for four quota alcoholic beverage licenses made available by revocation. Among those licenses, BHI made application for license number 47-00190, a quota license, initially issued before 1980 pursuant to the Leon County Special Act governing quota licenses; Chapters 63-1561 and 63-1976, Laws of Florida. License number 47-00190, a quota license revoked by the Agency approximately two years before BHI's application in 2001, became and remained available for reissuance at the time BHI filed its petition. The Agency denied BHI's application for revoked quota license no. 47-00190 in Leon County. A quota license is an alcoholic beverage license issued in a county whose population count, at the time of issuance, supports its issuance. In 1979, the Florida Legislature determined each county's population count to be 2,500 persons per quota license. In 2000, the Legislature determined each county's population count to be 7,500 persons per quota license. However, Section 561.19, Florida Statutes (2000), does not specifically direct the Agency to conduct a county's population re-count of 7,500 persons before the reissuance of a revoked quota license issued under the prior population count of 2,500 persons per county. The double-random selection drawing conducted by the Agency pursuant to Section 561.19, Florida Statutes, on October 31, 2001, included an alcoholic beverage license for use in Leon County that became available by virtue of the revocation of that alcoholic beverage license bearing license number 47-00190, which was issued before the change in the population count and the random selection method now contained in Section 561.19, Florida Statutes. The Agency based its denial of Leon County quota license 47-00190 in its Policy Statement of general applicability. The injury to BHI related to the denial of that quota license is within the zone of interest to be regulated and protected under Chapter 561, Florida Statutes, and Petitioner has standing to initiate and prosecute this proceeding. As alluded to before, BHI also made applications in July 2001 for revoked quota license number 26-00921 and revoked quota license number 26-00208 in Duval County; application for revoked quota license number 63-00525 in Polk County; and application for revoked quota license number 45-00073 in Lake County. Each revoked quota license was issued pursuant to the special act applicable to each county and was issued before the 1980 Amendment to Section 561.19, Florida Statutes. The Agency argues in its Proposed Final Order that Duval County (2) and Lake County (1) have exceeded their respective quota license limits, but does not address the quota license limits of the Polk County and the Leon County revoked quota licenses. It is assumed, based upon the fact the revoked quota licenses in those two counties were made available for reissuance, those quota licenses did not exceed the current quota limit of the 7,500 population count. The quota licenses above were revoked several years ago by the Agency and became available for reissuance. Regarding each application filed, BHI received a notice from the Agency stating that: There is no license currently available for issuance in a (specific) County. When licenses become available by reason of increase in population or revocation of a quota license, these licenses are re-issued pursuant to a double-random selection by public drawing. (Emphasis added) The parties entered into a stipulation concerning . . . the Division's policy statement that revoked alcoholic beverage licenses are to be included in drawings conducted pursuant to Florida Statutes, 561.19. . . . BHI challenged the Agency's Policy Statement of general applicability that revoked quota alcoholic beverage licenses are required to be included in a random drawing pursuant to Section 561.19, Florida Statutes. BHI argues that Section 561.19, Florida Statutes, authorizes double-random selection drawings for issuance of alcoholic beverage licenses in only two situations: (a) where licenses become available by an increase in population of a county; or (b) where a dry county, by special act, becomes a wet county. The Agency has embarked on a stated policy, not adopted as a rule, in which, contrary to Section 561.19, Florida Statutes, it includes all revoked quota licenses in the double- random selection drawing. The Agency has thus instituted an unwritten rule policy contrary to Sections 120.54 and 120.56(4), Florida Statutes. The policy statement was applied to BHI's applications for revoked licenses by letters from the Agency denying BHI's four applications for revoked quota licenses stating revoked quota licenses are to be placed in a random selection drawing pursuant to Subsection 561.19(2), Florida Statutes. The Agency, in its pubic legal notice, concerning a double-random selection drawing, set forth the total number of licenses available in each county that are to be awarded by the random selection drawing. Several of the counties listed in the legal notice have an asterisk next to the total licenses available for that county. The explanation by the Agency for the public notice asterisk is to identify those revoked quota licenses included in the total number of available licenses. The following findings of fact are based, in part, on the stipulation of the parties concerning this dispute. The Agency does not have an adopted rule that addresses inclusion of all revoked license in double-random selection drawings. The Agency agreed that the above Policy Statement had not been adopted as a rule by appropriate rulemaking procedures as defined in Sections 120.54 and 120.56(4), Florida Statutes. The Agency takes the position that Section 561.19, Florida Statutes, authorizes double-random selection by public drawing to be used when a quota license becomes available by an increase of 7,500 in a county's population. The Agency's position is that Section 561.02, Florida Statutes, grants the Division Director discretionary authority to enforce the Alcoholic Beverage Law, Chapter 561, Florida Statutes, in accordance with the Legislative intent. Accordingly, Section 561.19, Florida Statutes, is the grant of authority for the Agency's Policy Statement herein challenged. Additionally, the Legislative intent of Section 561.19, Florida Statutes, argues the Agency, is twofold: (1) it removed sole discretion from the Division Director to issue quota licenses, and (2) created a system to ensure licenses issued after 1980 would be in a fair and equitable manner to all applicants. The answer to the threshold question, of whether the Agency's Policy Statement at issue is intended to have the effect of law, is in the affirmative. Prior to the 1980 Amendment to Section 561.19, Florida Statutes, revoked quota license were reissued in accordance with Section 561.02, Florida Statutes (1979). An application was made for a specific revoked license; the application was reviewed and investigated, and if found in compliance with statutory requirements by the Agency, the Director issued the quota license to the approved applicant. The parties agreed that in the event that two applications were made for one license, the first application filed and approved would be granted the license.
The Issue Whether the Application for Alcoholic Beverage License dated March 9, 1988, filed by Ocie C. Allen, Jr., should be approved by the Respondent?
Findings Of Fact Ocie C. Allen, Jr., d/b/a OCA, filed an Application for Alcoholic Beverage License dated March 9, 1988 (hereinafter referred to as the "Application"), with the Division. In the Application, Mr. Allen indicated under "Type of Application" that the Application type was "Other - ownership change because of contract and change of location." Mr. Allen listed himself as the "Applicant" and signed the Application as the "Applicant." The "Current License Number" listed in the Application to be transferred to Mr. Allen is 62-03498, current series 4 COP. The holder of this license was Terri Howell. At the end of the Application there is an "Affidavit of Seller(s)" to be executed by the licensee from whom the license is to be transferred. This affidavit has not been completed in the Application. The purchase price for the business was listed as $86,250.00. By letter dated March 16, 1988, the Division returned the Application to Mr. Allen and informed him that it was being returned for the following reasons: (1.) Need copy of loan in the amount of $86,250.00. (2.) If there are other agreements concerning this change, we will need copies. (Closing Statements) (3.) Need Affidavit of Seller signed by Ms. Howell making sure signature has been notarized on both applications. (4.) If no business name, please use applicants [sic] name also in that blank. Mr. Allen returned the Application to the Division with a letter dated March 21, 1988, and indicated, in part, the following: The Loan of $86,250.00 is 75% of the appraised value for which a 4 COP license was sold in Pinellas County prior to Ms. Howell winning the drawing. This amount is reduced by the amounts she has received from the operation of Spanky's. Thereby the actual amount owed by me to Ms. Howell is $86,250.00 LESS the amount she has received during the operation of Spanky's, approximately, $60,000.00. The Application was not modified by Mr. Allen. In a letter dated March 24, 1988, the Director of the Division requested the following additional information from Mr. Allen: (1.) Need Affidavit of Seller signed by Ms. Howell making sure signature has been notarized on both applications. (2.) Complete (No.5) Type of License Desired: (Series ). By letter dated March 28, 1988, Mr. Allen responded as follows to the Division's request for information: Enclosed is the application for transfer. Ms. Howell signature [sic] on the Independent [sic] Contractor Agreement is the only signature of hers that will be furnished to you. By letter dated April 4, 1988, the Division informed Mr. Allen that Terri Howell, the licensee, needed to sign the Affidavit of Seller. The Division notified Mr. Allen that it intended to deny the Application in a letter dated May 31, 1988. Mr. Allen was provided a Notice of Disapproval of the Application in a letter dated June 29, 1988. The following reasons were given for denial of the Application: Application to transfer the license does not bear the signature of the current licensee and, therefore does not evidence a bonafide [sic] sale of the business pursuant to [Section] 561.32, Florida Statutes. Application incomplete as applicant has failed to provide complete verification of his financial investment. Also, applicant has failed to provide records establishing the annual value of gross sales of alcoholic beverages for the three years immediately preceding the date of the request for transfer. The Division is, therefore, unable to fully investigate the application pursuant to Florida law. By letter dated July 19, 1988, Mr. Allen requested a formal administrative hearing to contest the Division's denial of the Application. Mr. Allen sent a letter to the Division dated October 27, 1988, with an Affidavit requesting permission to pay a transfer fee of $5,000.00 "in lieu of the 4-mill assessment."
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be issued in this case dismissing the case with prejudice. DONE and ENTERED this 17th day of January, 1989, in Tallahassee, Florida. LARRY J. SARTIN Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 17th day of January, 1989. COPIES FURNISHED: Ocie C. Allen, Jr. Post Office Box 10616 Tallahassee, Florida 32302 Lt. B. A. Watts, Supervisor Division of Alcoholic Beverages and Tobacco Department of Business Regulation 345 S. Magnolia Drive, Suite C-12 Tallahassee, Florida 32301 Harry Hooper Deputy General Counsel Department of Business Regulation The Johns Building 725 South Bronough Street Tallahassee, Florida 32399-1007 Leonard Ivey, Director Department of Business Regulation The Johns Building 725 South Bronough Street Tallahassee, Florida 32301-1927 Joseph A. Sole General Counsel Department of Business Regulation The Johns Building 725 South Bronough Street Tallahassee, Florida 32301-1927
Findings Of Fact Ida Bartlett is the sole shareholder, officer and director of the Applicant corporation. She pursued the lottery drawing for Pasco County for a quota liquor license in order to embark on her own business venture involving the sale of alcoholic beverages for on-premises consumption in a lounge-type situation, as well as possibly to sell alcoholic beverages in a package store for off-premises consumption. On September 18, 1984, the Division informed Ms. Bartlett by letter that she had been selected in the lottery drawing for an available quota liquor license in Pasco County. The letter advised her that she had 45 days from the date of the letter to file her application with the Tampa field office of the Division, which she did. In preparing her application, she sought the advice and counsel of her son, Charles Bartlett, an attorney who has extensive experience in commercial and real estate matters, including commercial litigation, contract litigation, landlord tenant litigation and zoning matters, as well as experience representing other quota liquor license applicants as clients. Mr. Bartlett was tendered and accepted without objection as an expert in these areas of law, and in the interpretation of contracts, leases and other documents related to these fields of law. In particular, Mr. Bartlett currently represents establishments holding liquor licenses, has recently been actively involved in leasing and licensing matters for them and was counsel for a 4-COP quota liquor license applicant in Sarasota County with regard to the same lottery drawing as the instant application. After she was advised of her successful lottery drawing and of the right to file her application within the 45 days, Mr. Bartlett and Ms. Bartlett began the preparation process for the application by attempting to locate suitable premises in Pasco County at which to locate the license and operate the related business. Mr. Bartlett contacted several real estate brokers in this connection and eventually met Mr. Harry Sasser, who had an existing lounge establishment in Hudson, Florida, Pasco County. Mr. Sasser's premises were then used for only on premises consumption of alcoholic beverages in a lounge-type situation. Mr. Bartlett and Mr. Sasser negotiated an agreement, reduced to writing and executed by the Applicant and Mr. Sasser, whereby his premises would be used for the liquor license sought by Ms. Bartlett. That agreement was entered into on November 1, 1984. It provided that upon the issuance of a license to Ms. Bartlett, Mr. Sasser would place his liquor license in escrow so that the only license applicable and used at the Sasser premises would be the license to be awarded Ms. Bartlett. Ms. Bartlett entered into this agreement in good faith and with the bona fide intent to be bound by it and to actually operate the premises under the license she sought (Applicant's Exhibit 2, in evidence). Mr. Bartlett drafted the agreement which required Mr. Sasser to lease the premises to the Applicant upon the occurrence of the condition precedent which is the granting of the liquor license. The agreement does not specify a rental amount, but rather provides that the rent shall be the prevailing market rate upon the execution of the related lease, which the parties agreed to enter into upon the granting of the license. The agreement does not specify a date certain for execution of the lease, but rather provides that the leasing of the subject premises will take effect upon the issuance of the liquor license. Mr. Bartlett established that this agreement is a legally binding document and affords the Applicant a legal right of occupancy to Mr. Sasser's premises upon the occurrence of that condition precedent. Such provisions for rental payment at market rates are common in lease agreements of that nature, and such a provision as to rental amount does not mitigate the binding effect and enforceability of such an agreement. Agreements contingent on the occurrence of a specific event which would trigger the execution of a lease to which the agreement refers, are common. Otherwise there would be no purpose to be served in leasing the premises for either party, until it is clear that the Applicant can use the premises for the purposes for which the agreement and contemplated lease are intended. Charles Bartlett and the Applicant prepared and completed the remainder of the license application and related documents to be filed with it. Mr. Sasser was actively involved in the completion and submission of the application, and indeed took it himself to the Pasco County zoning Authority to secure that body's approval of the purpose to which the premises involved would be devoted. The Pasco County Zoning Authority indicated no objection to issuance of the liquor license for the Sasser premises and it is noted in three letters, (in evidence) from the Pasco County Attorney regarding the zoning question, that the property was correctly zoned for on-premises consumption of alcoholic beverages, which is what the premises were currently used for and would be used for under the sought license, at least in part. The letters from the County Attorney regarding zoning do indicate that if off-premises package store sales were engaged in under the sought liquor license, that further certification from the zoning authority concerning the question of whether that would be a substantial departure from the existing use of the premises might be necessary and that rezoning to commercial zoning might be necessary before the premises could be used for package sales for off-premises consumption. Mr. Bartlett opined, based upon his experience in similar liquor license application matters that the premises were appropriately zoned for the issuance of the subject liquor license. Mr. Sasser took the application to the appropriate health department official and secured his approval as to the suitability of the Sasser premises for the use of the liquor license. The zoning authority approval and health department approval were asserted on the face of the application when filed. On about November 1, 1984, Mr. Sasser, Mr. Bartlett, and Ms. Bartlett met at the Tampa field office of the Respondent to assemble the liquor license application, submit it, and sign the agreement concerning the use of Sasser premises. The Division's filing clerk thereupon reviewed the materials submitted with the application and the application to make certain that all information had been provided in the spaces and blanks on the application, and that it was duly executed and signed. Those parties then met with Mr. Espinola who identified himself to them as the "licensing officer" to review the completeness of the application. Mr. Espinola met with the parties for about 15 minutes to review the application and the related agreement with Mr. Sasser. After reviewing the Sasser agreement, Mr. Espinola suggested that Sasser enter into an escrow agreement for his existing liquor license for those premises, so that the Applicant's license, if issued, could be located at the Sasser premises without occurrence of the situation of two licenses being issued for the same premises. Mr. Sasser agreed and entered into and signed an escrow agreement to that effect in the presence of Mr. Espinola, Charles Bartlett and Ms. Bartlett, the principal of the applicant corporation. Mr. Espinola, on behalf of the Division, accepted the application as complete upon submission. Mr. Bartlett was advised that the acceptance of the application as complete would stand so long as he submitted an affidavit from his father concerning the source of financing for the proposed business. Mr. Bartlett had the affidavit executed the same day and sent it by Federal Express the same day to Mr. Espinola. He then called Mr. Espinola the following day to verify the receipt of the financial affidavit by Federal Express, and Mr. Espinola indicated that all was in order. Thereafter the Applicant, being advised that the application was complete and in order, waited to hear from the Division as to its decision regarding the application. Neither the Applicant nor her attorney, Mr. Bartlett, was contacted further by the Division or by anyone from its headquarters in Tallahassee concerning any questions regarding the review of the application. In the meantime, Ms. Bartlett and her attorney, Mr. Bartlett, remained in contact with Mr. Sasser to make certain that everything was still in order regarding their arrangement. Mr. Sasser gave them no indication that anything was amiss or that he had changed his position regarding escrow of his license and the lease of his premises to the applicant corporation. Since a binding agreement between the Applicant and Mr. Sasser had been entered into, and since the execution of the contemplated lease only required occurrence of the condition precedent, that is the issuance of the license, there was no reason to enter into other agreements by the parties until the license was issued. Thus, the Applicant and Mr. Sasser awaited the Division's decision before taking any further action regarding the application or the inauguration of the new business. On March 6, 1985, by letter, the Applicant was advised that its application was denied by the Division. This was the first indication the Applicant had that the application was not in order and would not be routinely approved following Mr. Espinola's assurance that the application was complete and in order. The Division indicated in its letter of denial that the bases for denial were a lack of establishment of a right of occupancy of the subject premises, and lack of sufficient zoning for the subject premises. Upon learning of the Division's denial of the application, Mr. Bartlett contacted the Tampa and Tallahassee offices of the Division seeking further explanation for the denial. He offered to file an amendment to the application to cure the alleged defects, but was informed by a staff member of Mr. Schoenfeld, the Bureau Chief's office, that amendments would not be accepted. Thereupon, the Applicant instituted this-administrative challenge to the denial of the application. During the interim period of time prior to the subject hearing, the Applicant took further steps to secure approval of the application. Thus, at Mr. Bartlett's behest, the Chief Assistant County Attorney for Pasco County provided Attorney Sandra Stockwell of the Division a letter setting forth further and clarifying the zoning authority's position regarding the Sasser premises. This letter (in evidence) makes clear that the County has no objection to the issuance of a 4-COP liquor license for the Sasser premises, although it points out that should the holder of the license desire to expand the alcoholic beverage use to include the sale of liquor for on-premises consumption then a determination would have to be obtained from the zoning administrator of the County whether or not the expansion constituted a substantial expansion of use. If the administrator determined that the expansion of use was substantial in nature, then the Board of County Commissioners would have to approve the actual sale of liquor on the premises. Correspondingly, if the holder of the license were to seek to expand the alcoholic beverage use for the Sasser premises to include the sale of alcoholic beverages for off-premise consumption (package sales) the same action would be necessary prior to actual sale of the alcoholic beverages for off-premise consumption. Additionally, rezoning of property to the appropriate commercial district would be required prior to sale of alcohol for off-premise consumption. The Applicant also secured alternate premises to locate the applied-for liquor license in the event the Sasser arrangement fails to consummate or is otherwise deemed undesirable. The Applicant thus entered into a three-year lease agreement with two 5-year options for premises on U.S. 19 in the City of Port Richey. These premises had been recently used as a lounge establishment and are equipped with all required lounge and bar equipment and fixtures. The lease depicted in Applicant's Exhibit 8, in evidence, gives the Applicant a legal right to occupy the premises identified in that lease for the purposes of this license application. Those premises, additionally, are zoned for commercial use, which according to the City of Port Richey Zoning Code is appropriate for the on premises consumption of alcoholic beverages. In this connection, it was established by Mr. Bartlett, based on his personal experience in representing liquor license applicants, that the Division has approved the issuance of 4-COP liquor licenses to a number of applicants he has represented for premises zoned for on-premises consumption of alcoholic beverages only without them being zoned at the time of issuance for off-premises package sales. DIVISION POLICY Mr. Barry Sehoenfeld is the Bureau Chief of Licensing and Records for the Division. He has been delegated the authority to process and finalize all quota liquor license applications and is in charge of the state-wide system for the review and issuance of alcoholic beverage licenses. He is the final decision maker on quota liquor license applications. Quota liquor licenses authorize license holders to sell alcoholic beverages for on-premise consumption and/or package sales. A quota liquor license enables the holder to sell alcoholic beverages for on-premise consumption, to sell such beverages in a package store capacity or both, according to Mr. Schoenfeld. Quota liquor licenses are issued on a county basis. Only a certain number of such licenses are issued in a county, depending on the population of the county. When the Division determines that it is appropriate for additional quota liquor licenses to be issued for a county, the Division holds a drawing and all interested persons may apply to get in the pool for the lottery drawing. When such a person is drawn, that person can then file an application with the Division for issuance of a liquor license. A "4-COP quota liquor license" refers to a county which has more than 100,000 population. When a party is selected from the lottery drawing to file an application for a quota liquor license, that person has 45 days from notice of the drawing to do so. The application is filed in the local field office of the Division in which the applicant seeks a license. The field office involved in this proceeding is the Tampa office. The application and all related documents must be filed with the licensing clerk of that field office, who then determines whether all documents are in order and whether the application can be accepted by the field office for review. Another staff member in the field office then meets with the applicant to determine whether all necessary forms and documents are complete. In the instant situation, that person was Mr. Espinola. According to Division policy, the field office will not accept an application if not complete. According to policy the applicant does not receive a letter regarding completeness from the field office, but simply a verbal understanding from the personnel of the field office that the application is complete upon submission and acceptance by that office. Here the Applicant was so informed. Once an application is submitted and deemed complete, the field office may ask the applicant for additional information. Requesting additional information is common practice and is often done after the 45-day submission deadline. In fact, if an application is missing the field office will contact an applicant to request that he provide the missing documents. According to Division policy, as explicated by Mr. Schoenfeld, review of an application should be performed with the applicant present so that additional information or explanation required may be done at that time. The intent of this policy is to keep the applicant advised of Division requirements and to communicate freely with an applicant to ensure that all necessary data is gathered for review. Further investigation of an application will be pursued if the field office supervisor deems that necessary and it is within the discretion of that supervisor as to whether an investigation is necessary, and if so, the scope of that investigation. If an investigation is deemed necessary, the supervisor should provide specific instructions to an investigator as to the scope of his investigation. There is no set time during which an investigation should be completed, and the scope depends on the particular circumstances of the application. It is common for an investigation to require one to to three months. The purpose of the investigation is to discover as much information as necessary to fairly make a recommendation on the application. After review by the field office, and any investigation by that office if it is deemed necessary, the field office makes a recommendation to the Division headquarters and Mr. Schoenfeld in Tallahassee regarding disposition of the license application. It is at this point that Mr. Schoenfeld becomes involved with any license application. Thereafter Mr. Schoenfeld makes a final determination on the application and the applicant is sent either a liquor license or a letter of denial. The letter of denial sets forth all bases for the Division's denial of such an application. According to statute, the application process must be completed and the Division must make its decision within 180 days. This time frame can be waived by an applicant however, if it appears for any reason that the statutory time requirement cannot be met, as for instance in situations where the premises to be used are not yet constructed or other delays have been encountered by the applicant or the Division, when both are acting in good faith. In such situations, the Division's decision on the application is placed in abeyance for an indefinite period until the premises are constructed or the other basis for delay by either the Division or the applicant in the review process have been alleviated. Mr. Schoenfeld also explained Division policy to allow for a liquor license holder to move his license to another premises by submitting an application to the Division for a transfer. Additionally, Division policy allows an applicant to propose to locate his license in a premise already holding a liquor license, if the existing license holder places his license in escrow. It is a routine matter for such previous license holders to place their licenses in escrow under these circumstances. Pursuant to the below-cited statutory authority, an applicant must have "suitable premises" in which to house or locate the liquor license for which it has applied. The Division interprets this to mean that an applicant must demonstrate a legal right of occupancy for the premises identified in an application. Mr. Schoenfeld acknowledged that the phrase "legal right of occupancy" is not defined by statute or agency rule, but that the intent is to make certain that an applicant has a lawful right to occupy the identified premises. The Division determines on a case by case basis whether an applicant has secured a lawful right of occupancy. Typically, this determination process does not employ the use of Division attorneys to review and determine from a legal standpoint whether a right of occupancy has been demonstrated. There is no statutory provision or Division rule which requires that written documentation be submitted with an application in establishing a legal right of occupancy. The Division's policy and procedures manual does not specifically require a right of occupancy document to be filed with the application. The Division's application form furthermore, does not require written documentation by the applicant to prove its legal right of occupancy. Although Mr. Schoenfeld indicated that the Division requires written documentation of an applicant's lawful right of occupancy to the identified premises, no specific type of agreement is required. Rather, any document reflecting a binding, lawful right of occupancy is sufficient, nor is it necessary that the written document be a lease agreement. In the instant case, as Mr. Bartlett established, a binding, written contract calling for the occupancy of the Sasser premises was timely executed by the parties to the application and filed with the application, which binds the parties to enter into a written lease upon the occurrence of the condition precedent, that is the issuance of the liquor license. The Division requires an applicant to show sufficient, appropriate zoning for the premises identified to be used in an application. On the second page of the application there is a section requiring indication whether the appropriate zoning authority has determined whether the identified premises are in compliance with existing zoning regulations. Additional information in the form of letters from the appropriate governing authority is commonly submitted with an application to demonstrate that the premises have sufficient zoning. A 4-COP quota liquor license authorizes on-premises consumption of alcoholic beverages and/or package store sales. In some situations, existing zoning regulations permit only the on-premises consumption of alcoholic beverages and not package store sales for off-premise consumption. That is the case with the Sasser premises involved herein and as to the alternate premises, depicted in Applicant's Exhibit 8, in evidence, although that property is commercially zoned. Commercial zoning also encompasses on-premises consumption of alcoholic beverages only. Division policy, however, provides that conditional zoning approvals are acceptable in the process of reviewing and granting liquor licenses. The Division has approved applications where the zoning only allowed on-premises consumption of alcoholic beverages and, as discussed above, in Mr. Bartlett's experience with his own clients such approval has been given where zoning only permitted on-premises consumption for quota liquor licenses on more than one occasion. In these situations, the Division's policy is that it is not responsible for enforcing the terms of the conditional zoning approval' that is a matter to be negotiated or enforced between the local zoning authority and the ultimate holder of the liquor license involved. Conditional zoning approval does not bar the issuance of a quota liquor license. Additionally, Mr. Schoenfeld corroborated Mr. Bartlett's testimony showing that it is often reasonable to waive the 180-day statutory time period to accommodate situations where an applicant must change the premises originally applied for in such instances where a landlord or owner of the premises originally identified in an application breaches the right of occupancy agreement after the application is submitted for review by the Division. In those instances, it has often been determined to be reasonable to allow an applicant to amend his application after the 45-day time period has elapsed to allow for such a change of premises. Licenses have indeed been issued frequently for alternate or changed premises from those originally identified in an application so long as an applicant has acted in good faith throughout the application process. Also, according to Division policy, if an applicant is making a good faith effort to arrange for a suitable, appropriately zoned premises from which to operate his license, the Division will permit the applicant to locate alternate premises in instances where zoning approval is denied subsequent to the 45-day period or has not yet been obtained at the end of the 45-day period. It should be noted that Mr. Bartlett described two instances where this policy was followed where the Division permitted a change of premises after submission of an application. In one case an application was submitted for premises in a shopping center not yet built. After it was filed and prior to issuance of the license, the applicant elected to change the location and to amend the application. The license was granted for the second location. In another situation an amendment to the application was effected after the 45-day period, proposing a change of premises. The amended application was approved by the Division and the zoning on the changed location allowed only on-premises consumption of alcoholic beverages and not package store sales. Even so the Division approved issuance of that license. DIVISION REVIEW Mr. William Fisher is a law enforcement investigator for the Tampa field office of the Division. Mr. Fisher's immediate supervisor is Reuben Espinola. Mr. Fisher's duties involve investigation of liquor license applicants and related premises to ascertain whether the application should be recommended for approval or not. He does not investigate applications independently, but rather acts on Mr. Espinola's instructions. Mr. Espinola normally does not instruct him as to the scope of his investigation (contrary to policy as stated by their superior, Mr. Schoenfeld). In any event, Mr. Espinola ordered Mr. Fisher to investigate the Ida Know, Inc. application without giving him specific instructions. Mr. Fisher was not present at the meetings between the applicant and Mr. Espinola and other members of the staff in the Tampa field office when the application was first submitted and accepted as complete. Mr. Fisher traveled to Mr. Sasser's establishment to investigate the application, and conferred with Mr. Sasser for approximately 75 minutes on January 29, 1985, which meeting constituted the entirety of his investigation of this application, although he had acknowledged that such application investigations normally require one to three months so as to discover as many facts as possible to completely and fairly conduct the review. The next day, however, Mr. Fisher recommended to his superiors that the application be denied after his single conversation with Mr. Sasser. No further investigation by the Tampa field office was performed. Mr. Fisher never conversed with the applicant nor Mr. Bartlett during the investigation or at any other time, nor did he communicate in writing with them, although he acknowledged that conversing with applicants concerning matters involved in investigation of an application is common practice. Mr. Fisher had not read the Division's policy and procedures manual in its entirety. He exhibited some unfamiliarity with Division policy, as for example, his belief that Division policy does not allow issuance of a liquor license for premises where the zoning does not authorize both on-premises consumption and package store sales for off-premises consumption. Mr. Schoenfeld acknowledged that Mr. Fisher misunderstood the pertinent Division policies regarding this liquor license application and the review of it, and yet Mr. Schoenfeld's denial of the application was based entirely on the investigation performed by the Tampa field office and specifically Mr. Fisher. Mr. Schoenfeld did not conduct any independent investigation of his own and never conferred with either Mr. Sasser, the Applicant, Ms. Bartlett, or Mr. Bartlett. His conclusion, and Mr. Fisher's conclusion that no right of occupancy of the Sasser premises existed was evidently based on the Division's Exhibit No. 3, which was not admitted into evidence. In any event, if indeed Mr. Sasser was seeking to recant his agreements with the Applicant and that fact was within the knowledge of Mr. Fisher or someone else in the Tampa field office or the Tallahassee office of the Division, no Division staff member ever contacted the Applicant to advise them of that purported situation, nor to seek additional information from the Applicant concerning it. Even if Mr. Sasser could successfully repudiate his agreement to escrow his liquor license and his agreement to allow the Applicant to use his premises, the Applicant has successfully established its right of occupancy and use of the alternative premises depicted and described in Applicant's Exhibit 8, however, which is zoned commercially such that on-premises consumption of any alcoholic beverage is permitted.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, and the candor and demeanor of the witnesses, as well as the pleadings and arguments of the parties, it is, therefore RECOMMENDED that the application of Ida Know, Inc. d/b/a The Anchorage, be approved and that the subject 4-COP quota liquor license be issued to that applicant in a manner consistent with the conditions and alternatives posited in the paragraph last above. DONE and RECOMMENDED this 1st day of April, 1986 in Tallahassee, Florida. P. MICHAEL RUFF, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 1st day of April 1986.
The Issue This case arises out of a Notice to Show Cause dated January 13, 1982, served by the Petitioner upon the Respondent requiring that the Respondent show cause as to why his Beverage License No. 26-02065 should not be suspended, revoked, or otherwise disciplined for having committed violations of the laws of Florida, and thus, a violation of Florida Statutes 561.29(1)(b). On January 28, 1982, the Respondent, by and through his attorney, Lacy Mahon, Jr., requested, in writing, a formal hearing pursuant to Section 120.57, Florida Statutes. On March 30, 1983, a Notice of Hearing scheduling the formal hearing in this matter for April 28 and 29, 1983, was served upon Mr. Lacy Mahon, Esquire, attorney for the Respondent. Prior to the formal hearing, Mr. Mahon contacted Mr. Watson, counsel for the Petitioner, and informed him that his client, Mr. Billy Freeman, had requested that he not appear at the hearing on behalf of Mr. Freeman and that Mr. Freeman also would not appear. The undersigned Hearing Officer also received an ex parte communication from the Respondent, Mr. Billy Freeman, inquiring as to the purpose of the formal hearing, and I explained to him that a Notice to Show Cause had been filed against his beverage license and that if he had any further questions, he should contact either his attorney or Mr. James Watson of the Division of Alcoholic Beverages and Tobacco. The Respondent nor his attorney appeared at the formal hearing in this matter. The petitioner presented as its evidence three exhibits. Petitioner's Exhibit 1 is an indictment charging the Respondent with burglary and arson dated June 4, 1982. Petitioner's Exhibit 2 is a certified copy of a judgment convicting the Respondent of arson in violation of Florida Statute 806.01(2). And Petitioner's Exhibit 3 was a late filed exhibit reflecting the license status and license number of the Respondent's beverage license. The Respondent did not appear, and, therefore, did not present any evidence.
Findings Of Fact The Respondent, Billy Freeman d/b/a The Mug, holds Beverage License No. 26-02065, Series 2-COP. On August 10, 1982, the Respondent, Billy Freeman, was convicted of arson, a second degree felony, in violation of Florida Statute 806.01(2). The Respondent was adjudicated guilty and sentenced to imprisonment for a term of 18 months. The conviction occurred in the Circuit Court of Duval County, Florida, Case No. 81-11038CF.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the Beverage License No. 26-02065, 2-COP be revoked. DONE and ENTERED this 25th day of May, 1983, in Tallahassee, Florida. MARVIN E. CHAVIS, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 25th day of May, 1983. COPIES FURNISHED: James N. Watson, Jr., Esquire Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301 Lacy Mahon, Esquire 350 East Adams Street Jacksonville, Florida 32202 Mr. Howard M. Rasmussen Director Division of Alcoholic Beverages and Tobacco 725 South Bronough Street Tallahassee, Florida 32301 Mr. Gary Rutledge Secretary Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301
Findings Of Fact Petitioner originally held alcoholic beverage license no. 26-532, Series 4-COP, as an individual. He transferred this license to M & S, Inc., a Florida corporation, about one year ago. Petitioner is a 50 percent shareholder in this corporation. Jimmy G. Maddox holds the other 50 percent stock interest. Petitioner and Maddox are currently engaged in civil litigation involving the corporate licensee. Respondent referred to this civil suit in its notice disapproving the transfer application, citing the pending litigation as a basis for disapproval. Petitioner has not purchased the license from the corporation or entered into any agreement in contemplation of license transfer. Rather, he believes he is entitled to the return of the license because he received no consideration for the prior transfer from either the corporation or Maddox. Alternatively, Petitioner asks that the prior transfer to the corporation be set aside due to this lack of consideration.
Recommendation From the foregoing findings of fact and conclusions of law, it is RECOMMENDED: That Respondent enter a Final Order denying Petitioner's request for transfer of alcoholic beverage license no. 26-532, Series 4-COP. DONE and ENTERED this 6th day of April, 1982 in Tallahassee, Florida. R. T. CARPENTER, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 6th day of April, 1982. COPIES FURNISHED: James A. Fischette, Esquire Suite 1916 Gulf Life Tower Jacksonville, Florida 32207 James N. Watson, Jr., Esquire Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301 Herbert T. Sussman, Esquire 3030 Independent Life Building Jacksonville, Florida 32202 Mr. Charles A. Nuzum, Director Division of Alcoholic Beverages and Tobacco 725 South Bronough Street Tallahassee, Florida 32301
Findings Of Fact 10. The Division hereby adopts and incorporates by reference the Finding of Fact in foto, as set forth in the Recommended Order.
Conclusions The Director, Division of Alcoholic Beverages and Tobacco, Department of Business and Professional Regulation (hereinafter’Division’), after consideration of the complete record of this case on file with the Division, hereby enters this Final Order.
The Issue Whether petitioner's application for transfer of an alcoholic beverage license should be granted, or denied on the ground that the license has been revoked.
Findings Of Fact On January 25, 1977, Armando Calo, through counsel, filed a Notice of Lien with DABT stating that he was a bona fide mortgagee on an alcoholic beverage license (4-COP, lic. no. 23-1901) held by the Intimo Lounge, Inc., 1601 Collins Avenue, Miami Beach, Florida. Citing Section 561.65, Florida Statutes, he enclosed a copy of his chattel mortgage and a check payable to DABT in the amount of $5.00. (P-1) By return letter dated February 4, 1977, C. L. Ivey, Jr., DABT's Licensing Supervisor, acknowledged receipt of Mr. Calo's Notice of Lien and stated that it would be made part of the Intimo Lounge, Inc. license file. At that time, administrative license revocation proceedings were pending against Intimo Lounge, Inc. So Mr. Ivey sent a copy of his February 4, 1977 acknowledgment letter to DABT's Miami Office, and included this notation: P.S. John: You need to immediately notify Attorney Solomon's [Calo's attorney's] office if and when an order to revoke is issued. He will then go to court to seek a judicial transfer. (P-2) On March 22, 1977, Charles A. Nuzum, DABT's Director, executed an order revoking Intimo Lounge, Inc.`s alcoholic beverage license. (R-1) Eight days later, on March 30, 1977, Armando Calo sued Intimo Lounge, Inc., seeking to foreclose his chattel mortgage on its alcoholic beverage license. By letter of the same date, counsel for Mr. Calo, citing Section 561.65, Florida Statutes, notified DABT of the filing of the foreclosure action; he also asserted that Mr. Calo had no knowledge of or participation in the causes for which the Intimo Lounge, Inc. beverage license was revoked. Copies of subsequent pleadings filed in the action were sent to DABT's legal department. DABT thus knew the suit was filed and was aware of its continued progress. (Testimony of Barone; P-3, P-4, P-11) The Circuit Court of Dade County ultimately entered a final judgment of foreclosure in Mr. Calo's favor. On August 17, 1979, pursuant to such judgment, the Clerk of the Court sold the Intimo Lounge, Inc. beverage license, at public sale, to intervenor Rene Valdes, 1710 N.W. 7th Street, Suite 7201, Miami, Florida for $25,000. Notice of the sale was published in the Miami Review, a newspaper circulated in Dade County. On August 28, 1979, the Clerk issued a Certificate of Title pursuant to Chapter 45, Florida Statutes. This Certificate certified that Intimo Lounge, Inc.`s alcoholic beverage license (4-COP, license no. 23-1901) had been sold to Rene Valdes on August 17, 1979, and that "no objections to the sale have been filed within the time allowed for filing objections." (Testimony of Valdes; P-5, P-6) Although DABT was aware of the protracted mortgage foreclosure litigation involving the Intimo Lounge, Inc. beverage license --which it had earlier revoked -- it never protested or sought to block the foreclosure action. It was not a party to the action; neither did it attempt to become one. (Testimony of Barone, Valdes) In September, 1979, a month after the judicial foreclosure sale, Nathaniel Barone, counsel for Intimo Lounge, Inc., wrote R. B. Burroughs, Jr., Secretary of the Department of Business Regulation, asking what steps were necessary to keep the Intimo Lounge, Inc. beverage license viable. An internal memorandum suggests that DABT was, at first, unprepared to answer that question and preferred, instead, to delay answering until an application for the license was filed. But, on October 4, 1979, Harold F. X. Purnell, the Department's General Counsel replied on behalf of Secretary Burroughs: It is the Division's position that the . . . license has been and presently is revoked pursuant to the actions pre- viously taken by [DABT]. Further, that in the absence of an order of appropriate jurisdiction entered in a proceeding to which the Division is a party we are powerless to transfer such license. (Testimony of Barone; P-7, P-10) Meanwhile, Rene Valdes, notified DABT of his purchase of the Intimo Lounge, Inc. beverage license and asked that it be held in escrow while he found a suitable purchaser and location. When DABT refused, Mr. Valdes petitioned the court, which had rendered the foreclosure judgment, to require DABT to process and transfer the license. The court denied his petition, at least in part, because DABT was not a party to the proceeding. After the court hearing, Mr. Valdes, together with his attorney, Charles Kelly, and DABT's counsel, Mr. Purnell, met outside the chambers and discussed their next step. Mr. Kelly discussed seeking a mandamus ordering DABT to issue the license. Mr. Purnell suggested, instead, that Mr. Valdes find a location and purchaser for the license, then submit an application to DABT -- something which Mr. Valdes had not yet done. Although Mr. Purnell did not assure them that the application would be approved, both Mr. Valdes and Mr. Barone gained an impression that it would be. 2/ Mr. Valdes, following Mr. Purnell's suggestion, found a location and buyer, then applied for a transfer of the license. DABT's denial resulted in this proceeding. (Testimony of Barone, Valdes) Under Section 561.65(1), Florida Statutes (1977), a lender licensed by the state holding a lien on an alcoholic beverage license had the right to enforcement of his lien against the license within 12 days after any order of revocation, provided it was revoked for causes which the lienholder had no knowledge and did not participate. If the lienholder purchased the license at foreclosure sale, he could operate under it or transfer it to a qualified person. Until August 17, 1980, it was DABT's long-standing practice and policy to make no distinction between licensed and unlicensed lenders (lien-holders). It allowed both licensed and unlicensed lienholders to file notice of liens against beverage licenses and honored the subsequent transfer of the license if the lien was enforced within 12 days of revocation. This practice was abruptly changed on the basis of an agency legal opinion. On August 17, 1980, one month before Gui-Dom filed its application, DABT's General Counsel rendered a legal opinion limiting Section 561.65 relief to lenders licensed by the state. After that date, until 1981, when the legislature removed the "licensed lender" language of Section 561.65, DABT applied Section 561.65 literally and only accepted liens filed by licensed lenders. (Testimony of LaRosa; P-13) But in October, 1980, DABT did not deny Gui-Dom's application for transfer of the Intimo Lounge, Inc. license because Armando Calo, the lienholder, lacked a lender's license. Instead, the application was denied because the license had been earlier revoked. As later explained by Barry Schoenfeld, DABT's Chief of Licensing: 2 [DABT] felt at the time that . . . there really was no license, that the license had already been revoked, and that there was no license for the court to sell [to Valdes]. (P-13, p. 25). But Section 561.65 specifically permits liens, under specified conditions, to survive license revocation. When asked to explain DABT's position in light of Section 561.65, Mr. Schoenfeld replied, "I don't know that I can explain it." (P-13, p. 16) Neither could Mr. Schoenfeld adequately explain why, in cases similar to this, DABT has approved license transfers while, here, they have not. (P-13, p. 23) It was not until after the denial of Gui-Dom's application that DABT contended that Section 561.65, Florida Statutes (1977), provides no relief because Armando Calo was not a licensed lender. (P- 9, P-13). Rene Valdes, a beverage license broker, operates a business known as "Beverage License, Inc." He specializes in obtaining and transferring alcoholic beverage licenses for clients and has a working knowledge of the Beverage Law, including DABT rules and practice. When he purchased the Intimo Lounge, Inc. license at the judicial sale, he did not know that it had been revoked by DABT. He did, however, know that there was license revocation litigation between Intimo Lounge, Inc. and DABT. He also knew that DABT had issued an emergency order suspending Intimo Lounge, Inc.'s license; and he knew that there were circuit court foreclosure proceedings involving the license. Yet he failed to ascertain the status of the license -- either by checking the files of DABT or the circuit court. But even if he had discovered that the license had been revoked, under DABT's long-standing practice and interpretation of Section 561.65, it would have made no difference. The license would have "survived" revocation because Armando Calo had timely enforced his lien. And it could have been sold at a judicial sale and transferred to a new qualified purchaser. (Testimony of Valdes, Harris; P-13) DABT has provided no record foundation for its abrupt discontinuance of prior agency practice and policy in August, 1980, a policy which allowed both licensed and unlicensed lien holders to file and timely enforce liens against beverage licenses. This policy enabled a lien to survive license revocation; and the license, which had been revoked earlier could then be transferred by judicial sale. The only explanation given for the change in policy, a change which DABT now relies on as cause for denying Gui-Dom's application, is that the agency changed its legal interpretation of Section 561.65 (1977). (Testimony of LaRosa; P-13)
Recommendation Based on the foregoing, it is RECOMMENDED: That Gui-Dom's application for transfer of alcoholic beverage license no. 23-1901, series 4-COP, be granted. DONE AND RECOMMENDED this 3rd day of February, 1983, in Tallahassee, Florida. R. L. CALEEN, JR. Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 3rd day of February, 1983.
